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Henny Youngman may be gone more than a decade, but his one-liners live on. And that old joke provides insight into what's happening with currencies.

Americans see currencies only in terms of the dollar, which is also how the foreign-exchange markets mainly see currency moves. And, excepting an anomalous jump as a result of the global financial crisis last year, the dollar's course has been steadily downward, not only in recent months but since 2002.

The U.S. Dollar Index, which tracks its value against six currencies -- the euro, the yen, the pound, the Canadian dollar, the Swiss franc and the Swedish krona -- has fallen 15% from its high in March. (Why are those currencies the criteria by which the dollar is measured? Good question.)

That was when the U.S. stock market bottomed and took off on its current rally. The safe haven of the dollar became less sought as risk appetites revived, so U.S. equities and the greenback diverged.

But the changes in the dollar have hit different currencies in different ways. Against the euro, the greenback was at its low for the year, with the common currency costing over $1.47 -- excruciatingly high for U.S. tourists in Europe. Meanwhile, sterling trades for $1.65, down from more than two bucks prior to the financial crisis when London was staking its claim as the once and future world finance capital.

To Americans, the pound still isn't cheap, but for travelers from the eurozone, it's a relative bargain. That's most evident in Ireland, as NPR's Marketplace radio program reported, where shoppers from the Irish Republic are heading to Northern Ireland, where their euros translate into more pounds and, thus, lower prices.

A similar phenomenon can be seen regularly in upstate New York or Michigan, where Canadians come to shop when their loonies go farther, as when their exchange rate approaches parity with the greenback.

Movements in exchange rates help provide a buffer for economies' adjustment, albeit not as neatly as textbooks would have credulous economics students believe.

The dollar was untethered from its anchor of a gold back on Aug. 15, 1971, and with few exceptions, the international monetary system has been a free-for-all since then. Adjustment of exchange rates were supposed to shrink trade imbalances, which manifestly hasn't happened.

On the other hand, the inability to adjust exchange rates is taking its toll in the eurozone. While Irish shoppers enjoy bargains in the U.K., the banking crisis in what the Financial Times dubbed "Direland" a couple of weeks ago is made worse by the euro's fixed exchange rate.

As MF Global observes:

"The financial system still seems quite stressed in the eurozone. Ireland announced that they have proposed bad bank plan which would remove toxic assets from the balance sheets of Irish banks in an effort to stimulate lending.

"The need for such facilities across some parts of Europe plays into the idea that a syncopated recovery will make things very difficult for the [European Central Bank.} Hiking rates too soon to manage inflationary risks in Germany will exacerbate problems in the weaker economies and challenge the euro."

Indeed, that the euro has held together through the tumult of the last year is remarkable given the strains across the eurozone, which stretches from the Arctic Circle in Finland to Greece in the Aegean. And that the common currency has managed to appreciate against the greenback is even more so.

ECB policy seems appropriate for the core of the eurozone in Germany, which is reviving thanks to exports of capital goods, especially to China. But the euro's strength may begin to impinge there, too.

The one currency that hasn't appreciated against the dollar is the Chinese renminbi because of Beijing's control of its exchange rate. The euro's appreciation makes exports from the eurozone to China more expensive, especially compared to U.S.-made goods.

As long as China's currency remains joined at the hip to the dollar, the impact of the dollar's weakness ironically is felt more outside the U.S. than within its borders. And to keep that exchange rate stable requires China to continue to accumulate U.S. assets, notwithstanding that nation's vocal complaints about American deficits that it is compelled to fund.

So, it does come back to the dollar. And the current situation appears untenable. America can't keep printing IOUs ad infinitum and expect the world to accept them. But what's the alternative?

The sustainability of the current arrangement gets back to that original proposition, "Compared to what?" That will be a subject for a future column.